Farm profits hit by bad weather, higher costs
BAD weather and rising costs are set to eat away recent gains in Irish farm incomes.
Dairy farmers will fare the worst with incomes falling by 30pc this year, Teagasc experts warned yesterday.
That's because world milk prices have fallen to around 30c a litre from a high of more than 40c last year, with higher feed costs also eating into profits.
Beef farmers will do better, however, as prices will be 15pc higher than in 2011, with the weaker euro helping make exports to the UK more attractive.
In 2011, the average income for dairy farmers was €70,000; beef farmers €11,000 and sheep farmers €17,000. The average income last year was €25,000.
Meanwhile, cereal farmers will benefit from higher grain prices thanks to lower harvests in rainswept Europe and draught-ridden America, according to Teagasc's Mid-Year Outlook for Irish Agriculture.
But crop diseases thanks to the poor weather in Ireland mean there will be a smaller harvest, leaving incomes more or less the same as in 2011.
Lamb and pig prices are also expected to remain strong. However, pig producers are particularly hit by high feed prices which constitute 73pc of their costs.
Across the board in agriculture, it's likely that last year's 30pc improvement in farm incomes will be eroded back to 2010 levels, said Teagasc economist Thia Hennessy.
Feed prices are up 15pc on 2011, while poor weather means farmers are likely to need 10pc more feed than last year. Fuel is also likely to come in 8pc more expensive than in 2011, while electricity prices (8pc) and fertiliser (5pc) are also higher.
Irish Farmers' Association president John Bryan said the report confirmed the downturn in farm incomes this year.
"Higher input costs, coupled with disastrous weather conditions and price falls in some commodities, are all combining to make 2012 a very challenging year," he said.
Cuts to farm schemes over the last four years were also beginning to impact very severely on thousands of low-income farmers, he said, adding that there could be no more cuts in the next Budget.
Meanwhile, Ireland is not likely to meet ambitious government targets for boosting food production, the State's farm research body has warned.
The key target of increasing milk production by 50pc by 2020 in the Food Harvest 2020 report will not be met as a more realistic assessment suggests it is likely to be around 20pc, Teagasc economist Kevin Hanrahan said yesterday.
The targets for increased beef, sheep and pig meat production are more achievable as they are linked to increased values rather than volumes of meat.